McDonald’s franchise owner Jim Darmody of Omaha notes that the Hollywood film about Ray Kroc doesn’t always put the self-proclaimed “founder” of the fast-food chain in a good light.
“The movie makes it seem like he stole something from the McDonald brothers,” Darmody said. “But I can’t fault him. He bought it from the brothers and made it a dynasty.”
Kroc, a milkshake multi-mixer salesman in his early 50s — his customers included Reed’s Ice Cream stands in Omaha — learned about Dick and Maurice McDonald when they put in a large order for mixers.
The intrigued salesman drove to San Bernardino, California, and saw that in the post-World War II era of carhop restaurants, the brothers had invented something new. Instead of employees delivering orders to customers at their cars, the McDonalds invited folks to walk up to a window, where a super-efficient preparation system ensured that they received food and drinks super-fast.
In 1955, an enthusiastic Kroc signed on as their franchiser, but the relationship became rocky because he thought they weren’t moving fast enough. In 1961, he bought out the brothers for $2.7 million.
Even though the McDonalds clearly founded McDonald’s, Kroc proclaimed himself the founder — hence, “The Founder,” the movie starring Michael Keaton as Kroc.
Though not literally the founder, Kroc certainly created something huge — a business behemoth that today numbers 36,000 stores worldwide and $22 billion in sales.
The Kroc-McDonald’s story includes plenty of Omaha angles today — such as the Kroc Center in South Omaha and the Ronald McDonald House near the University of Nebraska Medical Center, but also owner-operators like Darmody, 68.
He owns nine McDonald’s franchises in the Omaha area with 550 employees and has done well, but he says it was tough after he opened the first one on Jan. 9, 1986.
“Just because you have a McDonald’s franchise,” he said, “doesn’t mean you’re going to be wealthy.”
Growing up in St. Paul, Minnesota, Darmody excelled in sports and earned a hockey scholarship. He later became a salesman but resolved to find a business of his own.
While still in his sales job, he applied to McDonald’s and worked three years “without pay,” learning everything about operations. He finally was offered a franchise at a new Omaha location owned by McDonald’s at 72nd and Lake Streets.
The purchase price, he quipped, was “more money than I thought God printed.”
Darmody had to show he had $250,000 in liquid assets. Today, a total investment of between $1 million and $2.2 million is required, with liquid capital of $750,000.
Jim worked long hours and occasionally “slept on a plastic bench at the store at night.” His wife delivered fresh clothes at the drive-thru window.
Despite doing everything by the book, it didn’t go well. McDonald’s was understanding, he said, and lowered his rent.
He eventually made it a success and gradually bought other local McDonald’s franchises. Owner-operators, he said, are required to live within driving distance of their stores.
Though he missed out on family time with his three kids, Jim once reminded an adult daughter that because he worked so hard, she finished college and law school without debt.
The marriage ended after 27 years, but Darmody credits his ex-wife for her key role in helping run the business. He married again four years ago and says he is still busy, though he doesn’t spend quite as many hours working as he once did.
Ray Kroc not only made a fortune that his wife turned into philanthropy, Jim said, but also created opportunities for people like himself.
In the 1950s and ’60s, Omaha had carhop restaurants such as Todd’s at 77th and Dodge Streets and Caniglia’s Royal Boy on North 30th Street near Fort Omaha. (Sonic Drive-Ins still use carhops.)
The late Yano Caniglia enjoyed telling a story on himself: He was approached in the late ’50s about getting in on the ground floor of a no-carhops chain — but declined because he thought people didn’t want to get out of their cars.
Yes, it was McDonald’s. Instead, he eventually switched his operation to Mister C’s, a full-service restaurant that was popular for decades but closed 10 years ago.
In 1959, a brief story appeared on the back page of The World-Herald. It began: “A firm with headquarters in Chicago says it will build a $125,000 drive-in eating place here.”
The first McDonald’s in Omaha opened Feb. 7, 1960, at 8022 West Dodge Road. At the time, there were 150 McDonald’s restaurants in 29 states. That one is no longer there, but another sits about three blocks east and across the street.
Golden arches, Big Macs, Egg McMuffins and more became iconic in America and around the world. (On a tour of Japan a year and a half ago, my wife and I had enjoyed sardines and sushi with our sake, but near Kyoto we happily spotted a McDonald’s — and darted over for a cheeseburger, fries and a Coke.)
McDonald’s has endured criticism over the years, including from the late Omaha cholesterol-fighter Phil Sokolof. Meanwhile, the 2004 documentary “Super Size Me” about obesity in America led to changes at McDonald’s.
In August, McDonald’s USA announced more, including removing artificial preservatives from several items and using buns with no high-fructose corn syrup.
Darmody said the McDonald’s Corp. has an excellent inspection program at stores for consistency and cleanliness.
Communities, he said, also have benefited from the presence of McDonald’s.
Kroc died in 1984. His widow, Joan Kroc, who died in 2003, left her $1.5 billion estate to charity.
Among the beneficiaries was Omaha, where the Salvation Army Ray and Joan Kroc Corps Community Center opened in 2009. On the site of the old Wilson meatpacking plant, the Kroc Center includes an aquatic area, fitness equipment, a computer lab, a theater, a worship center and classrooms for art, dance and other activities.
The Ronald McDonald House, which provides a place to stay and other help for families whose children are treated at local health care facilities, benefits from donations by McDonald’s and by local franchise holders. (The other owner-operators in the Omaha area are Faye Hobley and Steve Leonard.)
Controversy remains over the contentious relationship between Kroc and the McDonald brothers, and that is shown in the movie. Relatives have said the brothers didn’t receive annual royalties that Kroc is said to have agreed to in a handshake.
But in a 1993 phone interview, Dick McDonald told me that he and his brother had no regrets about selling to Kroc for what later seemed a pittance.
“Neither of us had any youngsters who would go into the business,” said Dick, who had come up with the idea for golden arches. “I guess we could have stayed and piled up millions. But as my brother once said, ‘What can we do with $40 million that we can’t do with three or four million — except pay a lot of taxes?’ ”
The movie about Kroc, the McDonalds and McDonald’s received generally favorable reviews from critics but no Oscar nominations. And as of last weekend, the $15 million-budget film had grossed only $19.5 million worldwide at the box office.
Darmody, who has flipped a few burgers, said he learned some things from the movie, including how the brothers came up with the speedy production system. But without Kroc, he said, McDonald’s wouldn’t be what it is today.